On the Move: Unilever, BMW, Skanska
From Standard & Poor's European MarketScope
TOTAL (TOT ) was up €3.00 to €214.00. SocGen expects third quarter underlying profit of €3.1 billion, up 31% year-over-year and up 7% from the second quarter. The broker said continuing share buybacks will boost EPS growth to 35%. Morgan Stanley expects third quarter net income of €3.021 billion, up 28% year-over-year. Cheuvreux expected adjusted net income of €3.047 million vs a consensus range of between €2.8 billion and €3.2 billion. ING expected third quarter operating profit of €6 billion, with €2.8 billion net profit and adjusted EPS of €4.78 per share.
VIVENDI UNIVERSAL (V ) was up €0.42 to €26.52. The media company announced better-than-expected third quarter sales of €4.874 billion, up 12% or 8% like-for-like; while 9 month sales were up 10% to €12.759 billion, or up 8% like-for-like. The market forecast third quarter sales of €4.76. Universal posted nine months sales up 5% and but third quarter sales were down 1.5% like-for-like due to tough comparables. Vivendi Universal Games nine months sales were up 88% year-over-year, with third quarter sales up 151%, driven by the success of World of Warcraft. SFR also showed strong nine months sales up 21.2%. The company expects to beat its fiscal 2005 forecast earnings.
PUBLICIS (PUB ) was up €0.02 to €27.59. The company published third quarter revenues of €1.001 billion, +7.4%, representing organic growth of 6.2%. It said new business reached US$2.10 billion (€1.70 billion) and expressed confidence in prospects for organic growth (at least 6% in the fiscal year) and profitability announced at the end of July. Meanwhile, UBS raised the stock's price target to €32 from €31 and kept its buy recommendation. Cheuvreux said third quarter organic growth was above first half and management confirmed the fourth quarter should continue that trend, at least. The broker kept its selected list recommendation and €31 target price.
VW was down €0.36 to €44.87. The VW brand lost money in the third quarter but reaffirmed that it will make a profit in fiscal 2005. The company posted a nine months operating profit of €1.96 billion and pretax profit of €1.1 billion. Third quarter operating profit came in at €586 million after one-offs. Pretax profit was €432 million. It kept 2005 earnings guidance unchanged.
BMW was down €0.68 to €35.67. The carmaker's third quarter pretax profit slid more than expected to €647 million (consensus view €739 million) on quarterly sales of EUR 11.72 billion, a touch higher than expected. The company reiterated that it sees 2005 profit roughly flat year-over-year. Merck Finck says the figures are better than they look at first glance, noting that EBT and net income were significantly below its and consensus expectations. However, EBIT was above expectations. The broker says the main reason for the low EBT and net income was a €175 million burden in context of the exchangeable bond on Rolls Royce, which has nothing to do with the operating performance. The broker rated the stock a hold
ADIDAS was up €3.83 to €145.88. Third quarter net income beat forecasts, rising 28% to €209 million, when adjusted for the sale of the Salomon unit. Quarterly sales rose 9% to €1.92 billion, driven by growth in North America and Asia. The company reaffirmed that it expects net income to rise by at least 20% for the year as a whole.
KARSTADT was up €0.69 to €10.41. The company reported a rise in core nine months earnings to €158 million, a touch below expectations, on sales 7.8% lower at €8.1 billion, below the €8.44 billion consensus forecast. The company reiterated its 2005 forecast for a decline in sales, excluding assets to be sold, of about 5% and adjusted core profit of more than €350 million.
UNICREDIT was up €0.11 to €4.90. JP Morgan upped its target price to €5.80 from €4.92 and rated the stock overweight. Separately, Il Sole 24 Ore reported that the company has sold €1.7 billion of bad loans to General Electric (GE ) and ABN Amro (ABN ).
ALITALIA was up €0.12 to €6.14. Banca Intesa, Deutsche Bank (DB ) and ten other ten banks are set to guarantee the company 's capital hike, according to the Italian press. The deal is expected to be completed by the weekend, ahead of the airline's Monday board meeting.
VALENTINO was up €0.17 to €20.11. The company's board will propose to swap all its saving shares into new ordinary stock at a ratio of 1:1.
Netherlands br> GETRONICS was down €0.41 to €10.17. The company posted third quarter EBITAE of €18.0 million, with EBITAE margin of 2.6% versus 0.9% in the previous year. Sales amounted to €693 million, down from €1.729 billion in third quarter04. Service revenues fell to €588 million from €1.288 million in the previous year, while product revenues slipped to €105 million from €441 million year-over-year. Gross profit comes in at €133 million vs €292 million in the third quarter of 2004. Looking ahead, the company sees modest organic service revenues growth in 2005 and said non-services sales will continue to be de-emphasized. Kempen noted EBITAE was weaker than expected, while sales are in line with estimates. it kept its buy recommendation and €13 price target.
SKANSKA was up SEK5.00 to SEK118.50. Third quarter 2005 net profit came in at SEK973 million against SEK1.839 million in 2004, on sales down 0.58% year-over-year to SEK32.199 billion. EPS amounted to SEK2.31, versus SEK4.38 in the third quarter of 2004. Pretax profit came in at SEKI1.215 billion vs SEK2.394 billion in third quarter 2004. The company remained cautiously positive in its outlook for the Nordic market. It said the outlook for Latin American oil and gas projects is good, adding that the Czech Republic and Poland continue to show growth. UK construction volume is low, but the US market is strong, the company said.
SANDVIK was down SEK19.00 to SEK370.50. The company posted third quarter 2005 pretax profit up 25.6% year-over-year to SEK2.126 billion on net sales up 14.6% year-over-year to SEK15.554 billion.
TELEFONICA MOVILES was up €0.19 to €9.14. The company announced that third quarter net profit was up +24% to €615 million. Nine months net profit reached EUR 1.543 billion, up 8.8%; nine months EBITDA came in at €4.23 billion. The numbers were slightly ahead of average forecasts. Revenues rose 45.9% in the third quarter and 45.3% in nine months to reach EUR 12.05 billion. The company said synergies from the integration of BellSouth (BLS ) assets are already having a positive impact on its income statement.
SWISSCOM (SCM ) was down CHF0.50 to CHF424.75. Yesterday, Irish phone company eircom confirmed that it has received a bid approach, although a suitor was not named. Citigroup (C ) thinks Swisscom is the most likely acquirer although it believes Belgacom cannot be ruled out. The broker said this would be another attempt by the company to financially engineer its balance sheet. It argued that increased leverage helps (0.9x net debt to EBITDA fiscal 2006 on broker's numbers) but is not the cure and thinks other deals are needed longer term. The broker maintained its hold rating.
BARCLAYS (BCS ) was up £0.13 to £5.84. Deutsche Bank added the company to its Pan European Focus List. CSFB increased EPS estimates for 2005 by around 5% and 2006 by 2%, to 55.4p and 62.9p respectively. The broker forecasts reported EPS (the basis for analyst comparisons) of 54.3p and 60.6p.
VODAFONE (VOD ) was up £0.01 to £1.50. The company said it has entered into exclusive negotiations with the Rembrandt Trust to acquire up to an additional 15% economic interest in Vodacom for a net cash consideration of up to ZAR16.0 billion (£1.35 billion). This would increase the company's effective shareholding in Vodacom to 50% from 35%.
UNILEVER (UL ) was down £0.21 to £5.60. The company reported third quarter sales of €10.22 billion, up 4%, it was up 2% constant currencies and had an operating profit of €1.59 billion, down 4%, down 6% constant currencies. The pre-tax profit was €1.45 billion, down 4%, down 5% constant currencies; net profit from continuing operations of €1.025, down 11%, down 12% constant currencies. Underlying sales grew 3.5%, entirely from volumes. NV EPS of €1.46, up 25%. PLC EPS of 3.17p, up 6%. The company proposed an interim dividend of €0.66 per NV shares and 6.77p per PLC.
LONDON STOCK EXCHANGE was up £0.02 to £5.69. The company posted its first half turnover of £136.1, up 15%. It disclosed operating profit, before exceptional items, of £50.8 million, up 24%; adjusted EPS of 15.7p, up 40%. The exchange intends to return £250 million to shareholders following the end of the offer period, or as soon as circumstances allow.
ROLLS-ROYCE was unchanged at £3.72. Merrill Lynch downgraded the company to neutral from buy, noting that the stock is up 47% since May and is now trading on a significant premium to both the European sector and the UK market. The broker thinks this premium is justified with double digit earnings growth for at least the medium term, but found it difficult to see material upside from here. (See BW Online, 11/3/05, "Rolls-Royce, at Your Service")(
NORTHGATE was up £0.15 to £10.07. The company reported a good performance across all divisions. The first half was enhanced by licence sales originally budgeted for the second half. Management is confident of achieving another good outcome for the year as a whole.
RENTOKIL INITIAL was up £0.07 to £1.58. S&P Ratings Services lowered its credit ratings on the company and related entity to 'BBB' from 'BBB+'. At the same time, ratings were removed from CreditWatch, where they had been placed with negative implications on Sept. 9, 2005. The outlook is stable. The company reported third quarter revenues at CER of £559.50 million, +5.3% (9M £1.670 billion, +3.6%) operating income before central costs £88.7 million, -7.5%; pretax profit of £53.30 million, -21.3%. The group said the rate of profit deterioration is slowing, though numbers were worse than forecast.
MCCARTHY & STONE was down £0.29 to £6.21. The company announced fiscal year pretax profit of £127.40 million, -14%; EPS 87.6p, -12%; unit sales 1,983, -3.5%. It raised its dividend to 14p and said cash balances at the year end amounted to £38.3 million. The company said these were positive results against the toughest market seen in years.
Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)